G20 finance chiefs back tax deal, pledge to sustain recovery, watch inflation

WASHINGTON: Finance leaders from the G20 major economies on Wednesday endorsed a global deal to revamp corporate taxation and pledged to avoid premature withdrawal of fiscal support while keeping a close eye on inflation, according to a final draft communique seen by Reuters.

The G20 finance ministers and central bank governors also called on the International Monetary Fund to establish a new trust fund to channel a $650 billion issuance of IMF monetary reserves to a broader range of vulnerable countries. “We will continue to sustain the recovery, avoiding any premature withdrawal of support measures, while preserving financial stability and long-term fiscal sustainability, and safeguarding against downside risks and negative spillovers,” the G20 finance leaders said in the statement.

Given rising inflation pressures driven by supply chain bottlenecks and shortages as economies struggle to normalize, the leaders said that central banks are “monitoring current price dynamics closely.”

“They will act as needed to meet their mandates, including price stability, while looking through inflation pressures where they are transitory and remaining committed to clear communication of policy stances,” the G20 communique said.